Regular, non-temporary SHRA (hired on or after 1/1/2013) or EHRA employees-working at least 30 hours per week (.75 FTE or greater), for nine or more months per year on a recurring basis-are eligible to select the Optional Retirement Program (ORP) or Teachers’ and State Employees’ Retirement System (TSERS).
There is a special UNC System provision for SHRA employees who were originally hired prior to 10/01/2013 and are transferring to another position, that was advertised and recruited for within the UNC System, and have NOT been eligible to opt into the Optional Retirement Plan (ORP) in the past. The provision gives these eligible employees 60 days from the start date in their new position to choose to either stay in the TSERS or move to the ORP. Once the choice is made, employees will not be eligible to choose another retirement option in the future.
Your Mandatory Retirement Plan Decision Guide – This booklet provides a comparison between the Teachers’ and State Employees’ Retirement System (TSERS) and Optional Retirement Program (ORP).
Optional Retirement Program Summary – This guide programs a quick summary of the Optional Retirement Program.
How Do I Enroll?
Eligible employees have 60 days from commencing employment to elect to enroll in the Optional Retirement Program. During this period, the employee will need to select an ORP carrier and complete an ORP 1 Form that is returned to the University Benefits Office.
The employee will also need to set up an ORP account with TIAA and/or Fidelity (see What Are My Choices below). Failure to make an election within the 60-day time period will result in automatic membership in the Teachers’ and State Employees’ Retirement System (TSERS), the defined benefit plan. This consequence is irrevocable.
Note: NC State will take a “general retirement” amount of 6% of base salary during the 60-day enrollment period. Once a retirement plan is selected, the general retirement amount is refunded and then sent to the selected vendor.
How Do I Make Contributions?
Employer and employee contribution percentages are established by the General Assembly. Employee contributions to the Optional Retirement Program are made on a pre-tax basis as provided under Section 414(h) of the Internal Revenue Code. As a result, the University will deduct the contribution from your pay before calculating federal or state income tax withholding.
The employee may elect to allocate both his/her contribution and the University’s contribution to any one of the carriers or may direct his/her contribution to one carrier and the University’s to another. Contribution allocations may be changed during any future month for which the payroll office can accommodate the change. The employee determines the investment direction of both contributions.
Investment direction changes can be made by contacting the Optional Retirement Program carrier. Currently the employee contribution is 6% and the employer contribution is 6.84%.
What Are My Choices?
Fidelity and TIAA are authorized carriers for the Optional Retirement Program. Link directly to each carrier’s specific web-site below to enroll in an account and learn more about the carriers and their services, or contact a local representative.
Click on the Get Started link at the top, then under the Next Steps, click on Enroll Now, then click Enroll using your Access Code. Enter your SSN and 57555 as the access code. That will allow you to set up your account.
- 1-800-343-0860 (Retirement Services)
- Locally: Cleo Morgan 803-507-4960, email@example.com
- Schedule an Appointment with a Fidelity Consultant
Select North Carolina State University as your campus. Select the Enroll Now button. Under the Enroll Online section, click on the North Carolina State University Retirement Plans link. You can then register with TIAA.
- 1-800-842-2776 (Telephone Counseling Center)
- Locally: Joshua Scott, 919-687-5240, firstname.lastname@example.org OR LaFreita Whitehead, 919-687-5233, email@example.com
- Schedule an Appointment with a TIAA Consultant
What Is Vesting?
Employees who participate in the ORP are immediately 100% vested in their own contributions. An employee is considered fully vested after five years of participation in the ORP. If termination from employment occurs with less than five years of ORP participation, the employee becomes 100% vested in the ORP employer contribution provided all of the following requirements are met.
- Your new employer is a higher education institution that sponsors a substantially similar or “like” retirement plan
- The successor plan offers a “like retirement plan” that is underwritten by one of the four carriers currently underwriting the Optional Retirement Program benefit.
- You begin participation in that successor plan as your “core retirement plan” within 12 months following your termination of eligible service in the plan (usually your termination of employment) with The University of North Carolina
Note: Future Optional Retirement Program plan distributions may be restricted by the Optional Retirement Program carrier and/or the new employer if an employee terminates from The University of North Carolina. Employees in the ORP who leave NC State employment should complete an ORP-3 form and submit it the HR Benefits Office.
How Are My Benefits Calculated?
Retirement benefit amounts are based on the total accumulation in the account(s) including any credited interest or dividends, your age, the age of your annuity partner, if applicable, and the income option selected. There are no age or service requirements to meet in order for a vested participant to begin receiving a benefit.
What Are My Retirement Payment Options?
Each ORP carrier makes available a variety of retirement payment options designed to help employees customize their overall retirement program to meet personal and family financial needs. These may be fixed annuity payments or payments on a variable basis, or a combination thereof.
Employees may also elect to receive a lump sum distribution, as permitted by the Optional Retirement Program carrier(s), or leave the balance on deposit to accumulate tax-deferred earnings until a retirement payment option is elected. IRS regulations require an individual to begin receiving plan distributions no later than April 1 of the calendar year following the year in which the plan participant attains age 70 1/2 (if retired).
Note: To continue the State Health Plan coverage in retirement, the employee must elect and begin to receive a monthly retirement payment option from the ORP carrier.
Are There Any Additional Benefits?
If you become disabled, the total value of your Optional Retirement Program account is available for income benefits that will begin upon retirement.
In addition, participants of the Optional Retirement Program are covered under the North Carolina Disability Income Plan (DIPNC).
Voluntary supplemental disability benefits plans are available for long-term disability coverage; premiums are payroll deducted. The Standard Long Term Disability Plan is best suited for those employees who participate in the Optional Retirement Program.
In the event of the plan participant’s death, the total account value (employee and employer contributions) becomes 100% vested and available to the designated beneficiary(ies) on record. Contact your Optional Retirement Program carrier to update your beneficiary designation. If there is a need to change the beneficiary, contact the Optional Retirement Program vendor.
Retiree Health Insurance
Under current law, if you were first hired prior to October 1, 2006, and retire with five or more years of Optional Retirement Program (ORP) participation and receive a monthly benefit under the ORP, you are eligible to participate in the State’s Retiree Health Plan at little to no cost. The full cost of dependent coverage, if elected, must be paid by you.
If you were first hired on or after October 1, 2006, in order to be eligible for the State’s Retiree Health Plan at little to no cost, you must retire with 20 or more years of ORP participation and receive a monthly benefit under the ORP. If you have 10 but less than 20 years of ORP participation and receive a monthly benefit under the ORP, you will have to pay 50% of the full cost for your coverage, and with five but less than 10 years, you will have to pay the full cost for your coverage. In all cases, the full cost of dependent coverage, if elected, must be paid by you.
Guiding Policies and Other Resources